Effect this measure will have on costs and revenues of state government.

This measure will increase the costs of state government by establishing a minimum living wage for all public employees and requiring salary adjustments for all public employees which will result in substantially equivalent placement relative to existing pay ranges prior to the establishment of the minimum living wage.

Fiscal Note Detail

Over-all effect

Effect of Proposal

Fiscal Year

2011Increase/Decrease(use"-")

2012Increase/Decrease(use"-")

Fiscal Year(Upon FullImplementation)

1. Estmated Total Cost

0

452,937,002

452,937,002

Personal Services

0

377,447,502

377,447,502

Current Expenses

0

0

0

Repairs and Alterations

0

0

0

Assets

0

0

0

Other

0

75,489,500

75,489,500

2. Estimated Total Revenues

0

0

0

3. Explanation of above estimates (including long-range effect):

The current minimum entry level salary for classified (i.e., civil service) employees is $16,008 annually(Division of Personnel, Schedule of Salary Grades 2 - 26, Effective February 1, 2009). The difference between this rate and the proposed minimum living wage of $20,000 per year is $3,992 or 24.9375%. For purposes of simplicity, the estimate uses the rounded figure of 25%.

The proposed legislation requires that all classification pay scales reflect the minimum living wage and that the placement of all public employees in the new pay scales shall remain substantially equivalent to the placement of all employees in the existing pay ranges prior to the effective date of the legislation. Consequently, the pay of all employees would have to be raised by 25%.

The estimate is based on increasing the total annual salaries of state employees ($1,509,790,009 as of 1/31/2011 per Department of Revenue, State Budget Office, Report BD4025, Personal Services By Account Fiscal Year 2011)by 25%. Associated benefits increases are calculated at 20% of salary and are shown in the category of "Other."

Memorandum

The measure applies to all public employees which would included county and municipal employees. Costs for county and municipal employees are not included in this estimate.